Explain why bank failures are less likely today than they were prior to the 1930s.
What will be an ideal response?
Answers will vary, but should demonstrate understanding of the steps taken by the government to prevent failures. These include the creation of the Federal Deposit Insurance Corporation, greater government willingness to provide aid to distressed banks, the implementation of capital requirements and reserve requirements, and the ability of banks to borrow at the Fed’s discount window.
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When firms accuse competitors of predatory pricing, they almost always use as evidence
A) arbitrarily allocated joint costs. B) the disappearance of competitors. C) the profits of their competitors. D) their own losses. E) the gap between price and marginal cost.
Spending more time commuting in exchange for a lower monthly rent refers to a(n):
A) barter. B) trade-off. C) externality. D) monetary exchange.
Total surplus is
A. the sum of consumer’s surplus plus producer’s surplus. B. the consumer’s surplus minus the producer’s surplus. C. the product price minus the sum of consumer’s surplus and producer’s surplus. D. consumer surplus minus marginal utility of the produce.
Price controls often hurt those they are trying to help
a. True b. False Indicate whether the statement is true or false